I hope to accomplish a number of things during this time. I want to briefly share with you my thoughts relative to the threats facing the United States in the coming years. By virtue of the unclassified nature of this setting I will not go into great detail and look forward to more in-depth discussion of the threats with the Committee in closed session. I also want to discuss the broader issues of the capabilities the Intelligence Community requires to face these threats. The capabilities issue is one that fundamentally impacts the way we support policymakers and warfighters.

Challenges and Changes We Face

The war on terrorism has presented the Intelligence Community with challenges unlike any before. We are facing small groups of terrorists and extremist rather than standing armies. They operate out of homes and caves rather than military bases and government entities. They don't wear uniforms, they don't use conventional ordnance, and they don't observe norms and standards of civilized society. And only a few individuals may know the complete plan of a given terrorist plot.

In response we changed the way we gather secrets. Professional interrogation has become a very useful and necessary way to obtain information to save innocent lives, to disrupt terrorist schemes, and to protect our combat forces. The USG had documented success protecting people and capturing terrorists with information. As I have said before, the USG does not engage in or condone torture.

We will continue to be successful and take terrorists and extremists off the battlefield. But these are risky activities and I will be asking the men and women of the CIA to take more risks—justifiable risks—in the days and months to come. I would much rather explain why we did something than why we did nothing. I am asking your support.

Processing What We Collect

The volume and scope of information that the Intelligence Community collects, processes and provides to policymakers and warfighters has grown tremendously. We face several issues here.

First, I believe we have made great strides in improving the information flow between CIA, FBI, DHS, and others, yet we still face challenges. We all understand this and are working hard to improve the information sharing in all directions.

Second, as we continually vet sources of threat information we need to do better at discerning what is a real threat, and what is wishful thinking, and to establish a threshold for devoting analytical and operational resources to track down a lead. Establishing this threshold is also critical to our ability to provide intelligence on options for strategic decisions, and to give the American public an accurate assessment of the threat facing the country.

Third, for all of the successes we have had and advances we have made, serious and unnecessary damage is caused by media leaks. Unauthorized disclosures of classified information threatens the survivability of the sources and methods that we depend on. We have lost opportunity, if not capability, because of irresponsible leaks and we have made it easier for our enemies.

Making Intelligence Actionable

Collecting secrets - and keeping them secret - is only half the battle. Having intelligence that is actionable and is acted upon through clearly defined mechanisms is just as critical. Terrorists started the war on our soil. We have taken the war to them. Sometimes this requires what we euphemistically call a "kinetic" solution on foreign soil. We have to be able to use all of the tools at our disposal and understand the consequences of how we use them. Dealing successfully with dangerous terrorists requires rapid application of the proper capabilities whether the USG is conducting planned strikes or exploiting targets of opportunity.

Developing the Right Cadre

I welcome the President's directive to increase CIA's HUMINT and analytical capabilities by nearly half. The good news is that smart, eager, and talented people are applying for work in record numbers. Recruiting, training, equipping, and retaining the new more diverse workforce will be a growing endeavor. To do so, I want to help establish a National University of Intelligence, not just for the CIA, but for all agencies within the Intelligence Community. This will be one initiative I will bring to the DNI when he gets started. This will help define a new Intelligence Community culture, better coordinate the way we do business across the government, and enhance willing cooperation.

I look forward to the DNI's confirmation and leadership in bringing together the collective efforts of the Intelligence Community. He will be faced with decisions about how information is collected, prepared and delivered to the President and to other senior leaders and customers. I am ready to help the DNI marshal the efforts and resources of the domestic and international operations of IC agencies, not just in the war on terror but in our other necessary global endeavors. As I turn over the DCI Intelligence Community responsibilities, I am confident that the 15 agencies in the Intelligence Community will rally around the DNI and bring their unique abilities to bear on the joint mission of making America safer.

Threat

Now, I turn to specific threats. I will not attempt to cover everything that could go wrong in the year ahead. We must, and do, concentrate our efforts, experience and expertise on matters that are most pressing: defeating terrorism; protecting the Homeland; stopping the proliferation of weapons of mass destruction and drugs; and fostering stability, freedom and peace in the most troubled regions of the world.

Terrorism

Mr. Chairman, defeating terrorism will remain our top objective as widely dispersed terrorist networks present real danger to US national security interest at home and abroad.

Our reporting indicates al-Qa'ida is intent on finding ways to circumvent US security enhancements to strike Americans and the Homeland. Their intent, perhaps passion, to harm us for being who we are is just as vital as ever.

Our reporting that al-Qa'ida or another group wants to use chemical, biological, radiological, and/or nuclear weapons cannot be ignored.

The threat from a broader Sunni jihadist movement is broad. We have witnessed this in Madrid, Bali, the Philippines, Saudi Arabia and many other places. It is worth noting that other groups in Pakistan, Southeast Asia, Central Asia, East Africa, and Europe, also pose a significant threat to our security.

In Iraq, Zarqawi merged his organization with al-Qa'ida last year seeking to bring about the final victory of his vision of Islam over the "infidels" and "apostates."

Proliferation

Let me start with Libya, a good news story, and one that shows that with the patient perseverance the Intelligence Community can tackle and achieve remarkable things.

In 2004 Tripoli followed through with a range of steps to disarm itself of WMD and ballistic missiles. The US continues to work with Libya to clarify some discrepancies in the declaration, but all in all we are seeing some very helpful cooperation from Tripoli these days.

Looking to North Korea and Iran, we have different issues.

P'yongyang has announced it has a nuclear weapon capability.

Concern remains that Iran could utilize the uranium enrichment technology it is pursuing to achieve a nuclear weapon

Other Areas of Concern

In CHINA, Beijing's military modernization and military buildup are posing new questions for us. Improved Chinese capabilities seemingly threaten US forces in the region. China's recent legislation on secession speaks for itself.

In RUSSIA, the attitudes and actions of the former KGB associates that Putin has placed in positions of authority throughout the Russian government may be critical determinants of the course Putin will pursue in the year ahead.

In the MIDDLE EAST, the election of Palestinian President Mahmud Abbas, of course, marks a welcome step forward. There, nevertheless, are hurdles ahead as the Palestinian leadership tries to rebuild the Palestinian Authority and to counter terrorist groups that could destabilized the current calm and derail talks.

In SOUTHEAST ASIA, the Philippines is struggling with prolonged radical Islamic and Communist rebellions and the presence of terrorists seeking safe haven and training bases. Thailand is plagued with an increasingly volatile Muslim separatist threat in its southeastern provinces, and the risk of escalation remains.

In AFRICA, chronic instability in countries such as Sudan and Nigeria, and in areas such as the Horn of Africa, will continue to hamper counterterrorism efforts and offer a potential sanctuary for terrorists.

In LATIN AMERICA, the region is entering a major electoral cycle in 2005/2006, when Brazil, Colombia, Costa Rica, Ecuador, Mexico, Nicaragua, Peru, Venezuela, and now Bolivia will hold presidential elections. Several key countries in the hemisphere are potential flashpoints in 2005, including Venezuela, Haiti, Colombia and Cuba.

Mr. Chairman, Senator Levin - again, thank you for this opportunity. There are an awful lot of sore spots out there. We of course are trying to stay on top of them so we are well informed and can take appropriate action. The help of your committee will be invaluable.

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